SocGen Wins $50M U.K. Case Over Saad Group
Stock Chart for Societe Generale SA (GLE)
Societe Generale (GLE) SA, France’s second- biggest bank, won a U.K. lawsuit forcing a unit of Saudi Arabia’s Saad Group to repay a loan of almost $50 million guaranteed by its billionaire founder Maan al-Sanea.
Saad Trading Contracting & Financial Services must pay interest on the amount and at least 250,000 pounds ($386,000) of the bank’s legal fees, Judge Nigel Teare ruled today in London. Saad was accused in a trial in July of defaulting on the 2009 loan four months before saying it would seek to restructure its debt during the global credit crunch.
“We will be seeking leave to appeal,” Saad Group’s London-based spokesman, Tim Robertson, said in an e-mail.
Units of Saad Group and another Saudi company, Ahmad Hamad Algosaibi & Brothers Co., defaulted in 2009 after borrowing a total of about $15.7 billion from more than 80 banks, including London-based HSBC Holdings Plc. (HSBA) The companies, both based in Al- Khobar, in the country’s oil-producing region, are locked in litigation around the globe over who is at fault for the losses.
Saad Group, with businesses ranging from construction to information technology and health care, took out the disputed loan in January 2009, to finance a purchase of gold from the Australian precious metals refiner AGR Matthey, according to the judgment. Saad subsequently sold the gold to an unidentified buyer to obtain short-term financing.
Prior Gold Buy
While Paris-based Societe Generale, which financed an earlier gold purchase by Saad in 2007, had concerns about the risk of lending to Saad a second time, the bank’s desire to win a banking license in Saudi Arabia weighed on its decision to provide the loan, according to court papers.
Saad’s gold trading was handled by a consultant who arranged similar purchases for Algosaibi, according to the judgment.
A spokeswoman for Societe Generale in Paris didn’t immediately return messages left seeking comment.
Al-Sanea, deemed the world’s 62nd richest person by Forbes Magazine in 2009, is accused in the Algosaibi litigation of using fake documents to take out billions of dollars in loans in Algosaibi’s name. He married into the Algosaibi family before founding Saad Group and denies the allegations.
“Maan al-Sanea, from the outset, has consistently refuted all of Algosaibi’s allegations as wholly untrue,” Robinson said.
Al-Sanea last month won dismissal of a $9.2 billion asset freeze in the Cayman Islands after Algosaibi admitted failing to disclose evidence in a related case. The documents, which were discovered four months ago and undermine Algosaibi’s fraud claim against al-Sanea, forced Algosaibi to drop its defense in a $250 million lawsuit filed by HSBC and four other banks.
A similar asset freeze in the U.K. was lifted by a London court on Oct. 3.
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